02/13/2018

IRS Extends Effective Period of 2017 Forms W-4

In Notice 2018-14, the IRS extended the effective period of Forms W-4, Employee’s Withholding Allowance Certificate, for 2017 until February 28, 2018. A Form W-4 that claims an exemption from withholding for a year typically expires on February 15 of the following year, but this period has been extended for 2017 Forms W-4 since the 2018 Form W-4 has not yet been released. Notice 2018-14 also temporarily permits employees to claim exemption from withholding for 2018 by using the 2017 Form W-4 and temporarily suspends the requirement for an employee to provide a new Form W-4 to his or her employer within 10 days of a change in status that reduces the employee’s permissible withholding allowances. In addition, Notice 2018-14 provides that the optional withholding rate on supplemental wage payments is 22% for 2018 through 2025. The IRS has also released a new version of Publication 15 (Circular E), Employer’s Tax Guide for 2018 which provides additional information regarding an employer’s tax withholding obligations. Click here for Notice 2018-14 and here for the new version of Publication 15 (Circular E). Please contact the above author or the Thompson & Knight attorney with whom you regularly work if you have any questions regarding these developments.